The isreali mobile phone manufacturer of smallest cellphones in the world Modu Mobiles is shutting the shop! According to news reports on isreali news site Ynet (thanks to google translation), Modu Mobiles owes $123 million to investors and $21 million to the isreali bank. Modu tried to raise the funds through IPO, but the IPO attempt was unsuccessful. There was no sufficient interest in the market for the Modu Concept. We had initially covered about Modu Mobiles in our blog. If you recall Micromax brought Modu Mobiles to India by becoming the official distributor. Micromax even is selling one model of Modu under Micromax's brand name called "Micromax Modu T". The mobile is priced @ Rs. 9,400. Micromax even had plans to launch a android version of Modu called Modu W. All these plans would have to be shelved now I believe. Will micromax continue to sell Modu T?
Modu Mobiles is known the compact form factor. Users could plug in custom jackets on top of this compact device to get different form factors. It was a novel approach. Modu Mobiles raised $107 million in funding from Qualcomm and Sandisk! Experts believe that the whole concept was flawed and can never scale up. I believe they overestimated the market potential. These type of specialty products has to be dealt with slow and steady progress and can never be expected to scale up as fast as normal handsets do. It's sad to see the company going down.
Looks like Modu owes its employees salaries for months. What were they doing? Now, they have starting laying off its employees. The company would be officially closed by early february and only a small fraction of sales team will remain in place to sell off the inventory. What about the after-sales service? So, if you have been thinking about buying Modu-T mobile, think twice before you commit your money.
"Modu may also owe a substantial sum to former employees, who today filed a liquidation request with Israeli courts in an effort to recoup salaries they are allegedly owed. It now appears as though modu will be forced to close in early February and until then, only a small sales team will remain in place to sell off remaining inventory."
Via ynet (translated here)
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